Navigating a Tough Retail Market

With Christmas shopping season in full swing, many are watching the retail stocks, which are a mixed bag, so MoneyShow’s Tom Aspray investigates the charts of an ETF and two individual stocks for the best way to play the sector.

It was another day when stocks were buffeted by cross currents as the S&P futures were down almost 10 points in early trading as comments from Mario Draghi spooked the EuroZone markets. News later in the day that there actually was a stimulus plan soothed the US markets with the futures closing down just a point.

The Euro markets are showing nice gains in early trading with the German Dax up 1.3% on the back of similar gains in the Shanghai Composite overnight. The Dax had made a new all time high early Thursday before the ECB news caused the market to turn lower.

As the Christmas shopping season is in full swing, many are watching the retail stocks, which are a mixed bag. The largest holding in the SPDR S&P Retail ETF (XRT) is Tractor Supply Co. (TSCO), which is up 8% in the last month, while the second largest holding Whole Foods Market Inc. (WFM) is up over 22%.

The news has not been as rosy for other retailers as Aeropostale Inc. (ARO) was down over 28% Thursday and Abercrombie & Fitch Co. (ANF) is down 14.64% in the past month. So, what is the best way to play retail?

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Chart Analysis: The SPDR S&P Retail ETF (XRT) has holdings of just $825 million with an expense ratio of 0.35%. The ETF has 100 holdings with the top ten making just 11.8% of the ETF.